Retail inflation drops to 5-year low of 3.54% in July

IIP growth slows to 5-month low of 4.2% in Fune

Retail inflation dipped to a five-year low in July, bringing some relief to consumers and policymakers alike, while industrial production saw a significant slowdown, according to official data released on Monday.

Retail inflation, as measured by the Consumer Price Index (CPI), declined to 3.54 per cent in July 2024, down from 5.08 per cent in June and a steep drop from 7.44 per cent in July 2023. This marks the first time since September 2019 that inflation has fallen below the Reserve Bank of India’s (RBI) median target of 4 per cent. The RBI is mandated to keep inflation at 4 per cent, with a tolerance band of 2 per cent on either side.

The decline in inflation was primarily driven by subdued prices of food items and a favorable base effect. According to the National Statistical Office (NSO), inflation in the food basket dropped to 5.42 per cent in July, down from 9.36 per cent in June and 11.51 per cent a year ago. Key components like milk and milk products saw a 2.99 per cent increase, while oils and fats registered a deflation of 1.17 per cent. The prices of fruits increased by 3.84 per cent, whereas spices saw a decline of 1.43 per cent.